Did we have the luon pulled over our eyes? The great yoga pants shortage or the botched lululemon see-through yoga pants debacle of 2013, or whatever you want to call it is stretching to new scandalous heights. You see, the Tawianese supplier Lululemon blamed for the extra peekaboo material and hence the $20 million recall is fighting back. And things get shadier.
The Eclat Textile Company, also a supplier for biggies like Gap and Under Armour, said nothing was different about these pants and lulu even signed off on them, Eclat’s chief executive officer Roger Lo told the Wall Street Journal.
“All shipments to Lululemon went through a certification process which Lululemon had approved,” Eclat Chief Financial Officer Roger Lo said in an interview. “All the pants were manufactured according to the requirements set out in the contract with Lululemon.”
It shall also be noted that Lululemon claimed it was working closely with the manufacturer “to understand what happened during the period this fabric was made.” However, when Lo was contacted by the press, he said he hadn’t heard from the lulus about the recall.
This has gone from sheer to shady on the scandal-o-meter.
Yet, this isn’t the first time they’ve had a problem. Lululemon has had a few follies recently and this incident follows a bunch of complaints last year about colors bleeding on some of its tops. Analysts are freaking out, in a very calm analytic way, like they do, and are warning that the lulus don’t have enough oversight in their factories which is screwing up everything, including sales (read: stocks, because they’re analysts, and that’s what analysts care about).
“With the black Luon pant recall Lulu has now had its fourth quality control issue in the last year,” Credit Suisse analyst Christian Buss said in a note to clients. “We see some potential that Lulu risks alienating its core customer base should quality control issues persist.”
Uh oh. And now the company’s shares, after rising by about two-thirds last year, are down nearly 18% so far in 2013, scaring the already skittish shareholders who probably don’t practice yoga anyway.
What’s extra crazy about all of this is that Lululemon’s big sales trick is to keep stock of big sellers intentionally low, “in order to create scarcity and buzz—and to ensure customers pay full price as often as possible.” This strategy has helped them build a billion dollar business, but it was also causing problems last year and now it seems it’s really blowing up in their faces, or is it?
Because of the 17% of yoga pants affected by this “too sheer” scare, lulu has already had to cut its first quarter sales forecast by about $20 million. Some could say that’s a manufacturing problem, some could say it was another manufactured strategy, in the form of a shady screw up.
This is nothing new, lulu fans say, and customers have been complaining for a while. Why are they making it a big deal now? Via Fashionista.com:
“Personally I think it’s a deflection and their numbers are going to be awful on Thursday [when the brand has a scheduled earnings call],” Carolyn Beauchesne, 48, who runs another popular Lulu fan blog, Lululemon Addict, told us. “It’s weird they’re owning up to it now.”
[Lululemon fan blog] Lulumum’s [Cristina] Chalmers agrees. “Now that sales have dropped they’re using it as an excuse to investors,” she said. “It’s a ‘solveable’ problem. If they didn’t have an explanation as to why the numbers are lower, then what can they solve?”
A scandal in see-through yoga clothing.
We’ll stick to our comparatively cheap-o, non-scandal tinged pants for yoga, thanks.